Thursday, October 29, 2020

Welcome to California Bankruptcy Central, my California bankruptcy blog. Wait,don't go if you live in another state! It doesn't matter where you live--bankruptcy is a federal affair and there are few differences (exemptions and median income amounts among them) between states.

Disclaimer: I am not a lawyer but I did need to hire one.

I am a bankruptcy filer and have been where you are now. I filed a Chapter 7 bankruptcy in the Central district of California and was successfully discharged. I learned a lot of things the hard way and this blog is about sharing them with you. Nothing here is intended to be legal advice. Please consult with an attorney for your legal needs.

Two things you need to know:

A. Much of what you read about bankruptcy on the internet is not true. Have you ever wondered why a google search sometimes returns the most insane results that are not what you want and sometimes you cannot even understand what the heck you are reading?

It's because many of the authors on the web don't know what they are talking about. They don't write well and often they don't even live in the United States!

All I'm trying to say is be careful of believing anything you read on the internet. I encourage you to also verify anything I have to say by consulting with an attorney.

B. The "New" bankruptcy is not "New" anymore. The bankruptcy laws were changed in 2005 so can we please stop calling them new? The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made it more difficult for consumers to file a chapter 7 bankruptcy but not impossible. Not even all that hard for most.

Prior to 2005, debtors of all incomes could file for bankruptcy under Chapter 7. Under the current laws, a debtor's income is calculated and compared to the median income of their state. If the debtor's income is above the median income amount of the debtor's state, the debtor is subject to a "means test."

If the debtor does not pass the "means" test, they have to file a Chapter 13 bankruptcy, instead of a 7, which means that they will have to repay some of their debt.

Many, many people still qualify for a Chapter 7 and I will have more about the means test in another post.